Federal Register: June 3, 2010 (Volume 75, Number 106)
DOCID: fr03jn10-14 FR Doc 2010-11974
ENVIRONMENTAL PROTECTION AGENCY
U.S. Citizenship and Immigration Services
CFR Citation: 40 CFR Parts 51, 52, 70, et al.
RIN ID: RIN 2060-AP86
EPA ID: [EPA-HQ-OAR-2009-0517; FRL-9152-8]
NOTICE: Part II
DOCID: fr03jn10-14
DOCUMENT ACTION: Final rule.
SUBJECT CATEGORY:
Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
DATES: This action is effective on August 2, 2010.
DOCUMENT SUMMARY:
EPA is tailoring the applicability criteria that determine which stationary sources and modification projects become subject to permitting requirements for greenhouse gas (GHG) emissions under the Prevention of Significant Deterioration (PSD) and title V programs of the Clean Air Act (CAA or Act). This rulemaking is necessary because without it PSD and title V requirements would apply, as of January 2, 2011, at the 100 or 250 tons per year (tpy) levels provided under the CAA, greatly increasing the number of required permits, imposing undue costs on small sources, overwhelming the resources of permitting authorities, and severely impairing the functioning of the programs. EPA is relieving these resource burdens by phasing in the applicability of these programs to GHG sources, starting with the largest GHG emitters. This rule establishes two initial steps of the phasein. The rule also commits the agency to take certain actions on future steps addressing smaller sources, but excludes certain smaller sources from PSD and title V permitting for GHG emissions until at least April 30, 2016.
SUMMARY:
Environmental Protection Agency
SUPPLEMENTAL INFORMATION
I. General Information
A. Does this action apply to me?
Entities affected by this action include sources in all sectors of
the economy, including commercial and residential sources. Entities
potentially affected by this action also include States, local
permitting authorities, and tribal authorities. The majority of
categories and entities potentially affected by this action are expected to be in the following groups:
Industry group NAICS \a\ Agriculture, fishing, and hunting...... 11.
Mining................................. 21.
Utilities (electric, natural gas, other 2211, 2212, 2213.
systems).
Manufacturing (food, beverages, 311, 312, 313, 314, 315, 316. tobacco, textiles, leather).
Wood product, paper manufacturing...... 321, 322.
Petroleum and coal products 32411, 32412, 32419. manufacturing.
Chemical manufacturing................. 3251, 3252, 3253, 3254, 3255, 3256, 3259.
Rubber product manufacturing........... 3261, 3262.
Miscellaneous chemical products........ 32552, 32592, 32591, 325182, 32551.
Nonmetallic mineral product 3271, 3272, 3273, 3274, 3279. manufacturing.
Primary and fabricated metal 3311, 3312, 3313, 3314, 3315,
manufacturing. 3321, 3322, 3323, 3324, 3325,
3326, 3327, 3328, 3329.
Machinery manufacturing................ 3331, 3332, 3333, 3334, 3335, 3336, 3339.
Computer and electronic products 3341, 3342, 3343, 3344, 3345, manufacturing. 4446.
Electrical equipment, appliance, and 3351, 3352, 3353, 3359. component manufacturing.
Transportation equipment manufacturing. 3361, 3362, 3363, 3364, 3365,
3366, 3366, 3369. Furniture and related product 3371, 3372, 3379.
manufacturing.
Miscellaneous manufacturing............ 3391, 3399.
Waste management and remediation....... 5622, 5629.
Hospitals/Nursing and residential care 6221, 6231, 6232, 6233, 6239. facilities.
Personal and laundry services.......... 8122, 8123.
Residential/private households......... 8141.
NonResidential (Commercial)........... Not available. Codes only exist
for private households,
construction, and leasing/
sales industries. \a\ North American Industry Classification System.
B. How is this preamble organized?
The information presented in this preamble is organized as follows: Outline
I. General Information
A. Does this action apply to me?
B. How is this preamble organized?
C. Preamble Acronyms and Abbreviations
II. Overview of the Final Rule
III. Background
A. What are GHGs and their sources?
B. Endangerment Finding and the LDVR
1. Endangerment Finding
2. LightDuty Vehicle Rule
C. What are the general requirements of the PSD program?
1. Overview of the PSD Program
2. General Requirements for PSD
D. What are the general requirements of the Title V operating permits program?
1. Overview of Title V
2. Title V Permit Requirements
E. The Interpretive Memo
IV. Summary of Final Actions
[[Page 31515]]
A. How do you define the GHG pollutant for PSD and Title V purposes?
1. GHG Pollutant Defined as the SumofSix WellMixed GHGs
2. What GWP values should be used for calculating CO
B. When will PSD and Title V applicability begin for GHGs and emission sources?
1. What are the Step 1 thresholds, timing, and calculation methodology?
2. What are the Step 2 thresholds, timing, and calculation methodology?
3. What about Step 3?
4. What about the proposed 6year exclusion for smaller sources?
5. When and how will EPA take further action on smaller sources?
C. How do state, local, and tribal area programs adopt the final GHG applicability thresholds?
D. How do you treat GHGs for purposes of Title V permit fees?
E. Other Actions and Issues
1. Timing for Permit Streamlining Techniques
2. Guidance for BACT Determinations
3. Requests for Higher CategorySpecific Thresholds and Exemptions From Applicability
4. Transitional Issues Including Requests for Grandfathering V. What is the legal and policy rationale for the final actions?
A. Rationale for Our Approach to Calculating GHG Emissions for PSD and Title V Applicability Purposes
1. Grouping of GHGs Into a Single Pollutant
2. Identifying Which GHGs Are Included in the Group
3. Use of GWP vs. MassBased GHG Thresholds
4. Determining What GWP Values Are To Be Used
5. Use of Short Tons vs. Metric Tons
B. Rationale for Thresholds and Timing for PSD and Title V Applicability to GHG Emissions Sources
1. Overview
2. Data Concerning Costs to Sources and Administrative Burdens to Permitting Authorities
3. ``Absurd Results,'' ``Administrative Necessity,'' and ``One StepataTime'' Legal Doctrines
4. The PSD and Title V Programs
5. Application of the ``Absurd Results'' Doctrine for the PSD Program
6. Application of the ``Absurd Results'' Doctrine for the Title V Program
7. Additional Rulemaking for the PSD and Title V Programs
8. Rationale for the Phasein Schedule for Applying PSD and Title V to GHG Sources
9. ``Administrative Necessity'' Basis for PSD and Title V Requirements in Tailoring Rule
10. ``OneStepataTime'' Basis for Tailoring Rule
C. Mechanisms for Implementing and Adopting the Tailoring Approach
1. PSD Approach: Background and Proposal
2. Rationale for Our Final Approach to Implementing PSD
3. Other Mechanisms
4. Codification of Interpretive Memo
5. Delaying Limited Approvals and Request for Submission of Information From States Implementing a SIPApproved PSD Program
6. Title V Programs
D. Rationale for Treatment of GHGs for Title V Permit Fees
E. Other Actions and Issues
1. Permit Streamlining Techniques
2. Guidance for BACT Determinations
3. Requests for Higher CategorySpecific Thresholds or Exemptions From Applicability
4. Transitional Issues Including Requests for Grandfathering VI. What are the economic impacts of the final rule?
A. What entities are affected by this final rule?
B. What are the estimated annual benefits to sources due to regulatory relief from the statutory requirements?
1. What are annual estimated benefits or avoided burden costs for title V permits?
2. What are annual benefits or avoided costs associated with NSR permitting regulatory relief?
C. What are the economic impacts of this rulemaking?
D. What are the costs of the final rule for society?
E. What are the net benefits of this final rule? VII. Comments on Statutory and Executive Order Reviews
A. Comments on Executive Order 12866Regulatory Planning and Review
B. Comments on the Paperwork Reduction Act
C. Comments on the RFA
D. Comments on the Unfunded Mandates Reform Act
E. Comments on Executive Order 13132Federalism
F. Comments on Executive Order 13175Consultation and Coordination With Indian Tribal Governments
G. Comments on Executive Order 13211Actions That Significantly Affect Energy Supply, Distribution, or Use
VIII. Statutory and Executive Order Reviews
A. Executive Order 12866Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132Federalism
F. Executive Order 13175Consultation and Coordination With Indian Tribal Governments
G. Executive Order 13045Protection of Children From Environmental Health and Safety Risks
H. Executive Order 13211Actions That Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898Federal Actions To Address
Environmental Justice in Minority Populations and LowIncome Populations
K. Congressional Review Act
L. Judicial Review
IX. Statutory Authority
C. Preamble Acronyms and Abbreviations
The following are abbreviations of terms used in this preamble. ANPR Advance Notice of Proposed Rulemaking
APA Administrative Procedure Act
AQRVs Air Quality Related Values
BACT Best Available Control Technology
Btu British thermal units
Btu/hr British thermal units per hour
CAA or Act Clean Air Act
CAAAC Clean Air Act Advisory Committee
CAFE Corporate Average Fuel Economy
CH
CO Carbon Monoxide
CO
CO
EPA U.S. Environmental Protection Agency
FDA Food and Drug Administration
FIP Federal Implementation Plan
FTEs FullTime Equivalents
GHG Greenhouse Gas
GHz Gigahertz
GWP Global Warming Potential
HAP Hazardous Air Pollutant
HFCs Hydrofluorocarbons
ICR Information Collection Request
IPCC Intergovernmental Panel on Climate Change
LDVR LightDuty Vehicle Rule
MACT Maximum Achievable Control Technology
MCL Maximum Contaminant Level
N
NAAQS National Ambient Air Quality Standard
NHTSA National Highway Traffic Safety Administration
NMOC Nonmethane Organic Compounds
NO
NPDES National Pollutant Discharge Elimination System
NSPS New Source Performance Standard
NSR New Source Review
NTAA National Tribal Air Association
NTTAA National Technology Transfer and Advancement Act
OMB Office of Management and Budget
PFCs Perfluorocarbons
PM Particulate Matter
PSD Prevention of Significant Deterioration
PTE Potential to Emit
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
RTC Response to Comment
SBA Small Business Administration
SBAR Small Business Advocacy Review
SBREFA Small Business Regulatory Enforcement Fairness Act
SF
SIP State Implementation Plan
SNPR Supplemental Notice of Proposed Rulemaking
TIP Tribal Implementation Plan
TRS Total Reduced Sulfur
TSD Technical Support Document
tpy Tons Per Year
UMRA Unfunded Mandates Reform Act
UNFCCC United Nations Framework Convention on Climate Change VOC Volatile Organic Compound
[[Page 31516]]
II. Overview of the Final Rule
EPA is relieving overwhelming permitting burdens that would, in the
absence of this rule, fall on permitting authorities and sources. We
accomplish this by tailoring the applicability criteria that determine
which GHG emission sources become subject to the PSD and title V
programs \1\ of the CAA. In particular, EPA is establishing with this
rulemaking a phasein approach for PSD and title V applicability, and
is establishing the first two steps of the phasein for the largest
emitters of GHGs. We also commit to certain followup actions regarding
future steps beyond the first two, discussed in more detail later. Our
legal basis for this rule is our interpretation of the PSD and title V
applicability provisions under the familiar Chevron \2\ twostep
framework for interpreting administrative statutes, taking account of
three legal doctrines, both separately and interdependently: They are
what we will call (1) The ``absurd results'' doctrine, which authorizes
agencies to apply statutory requirements differently than a literal
reading would indicate, as necessary to effectuate congressional intent
and avoid absurd results, (2) the ``administrative necessity''
doctrine, which authorizes agencies to apply statutory requirements in
a way that avoids impossible administrative burdens; and (3) the ``one
stepatatime'' doctrine, which authorizes agencies to implement
statutory requirements a step at a time. This legal basis justifies
each of the actions we take with this rulee.g., each of the first two
steps of the phasein approachboth (1) as part of the overall
tailoring approach, and (2) independently of each other action we take
with this rule. EPA also has authority for this Tailoring Rule under
CAA section 301(a)(1), which authorizes the Administrator ``to
prescribe such regulations as are necessary to carry out his functions under [the CAA].''
\1\ Unless otherwise indicated, references in this preamble to
``title V,'' ``title V requirements,'' the ``title V program,'' and
similar references are to the operating permit provisions in CAA
sections 501506, and not the ``small business stationary source
technical and environmental compliance assistance program'' under CAA section 507.
\2\ Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984).
For the first step of this Tailoring Rule, which will begin on
January 2, 2011, PSD or title V requirements will apply to sources' GHG
emissions only if the sources are subject to PSD or title V anyway due
to their nonGHG pollutants. Therefore, EPA will not require sources or
modifications to evaluate whether they are subject to PSD or title V
requirements solely on account of their GHG emissions. Specifically,
for PSD, Step 1 requires that as of January 2, 2011, the applicable
requirements of PSD, most notably, the best available control
technology (BACT) requirement, will apply to projects that increase net
GHG emissions by at least 75,000 tpy carbon dioxide equivalent
(CO
The second step of the Tailoring Rule, beginning on July 1, 2011,
will phase in additional large sources of GHG emissions. New sources as
well as existing sources not already subject to title V that emit, or
have the potential to emit, at least 100,000 tpy CO
EPA believes that the costs to the sources and the administrative burdens to the permitting authorities of PSD and title V permitting will be manageable at the levels in these initial two steps, and that it would be administratively infeasible to subject additional sources to PSD and title V requirements at those times. However, we also intend to issue a supplemental notice of proposed rulemaking (SNPR) in 2011, in which we will propose or solicit comment on a third step of the phasein that would include more sources, beginning by July 1, 2013. In the same rulemaking, we may propose or solicit comment on a permanent exclusion from permitting for some category of sources, based on the doctrine of ``absurd results,'' within the Chevron framework. We are establishing an enforceable commitment that we will complete this rulemaking by July 1, 2012, which will allow for 1 year's notice before Step 3 would take effect.
In addition, we commit to explore streamlining techniques that may well make the permitting programs much more efficient to administer for GHGs, and that therefore may allow their expansion to smaller sources. We expect that the initial streamlining techniques will take several years to develop and implement.
We are also including in this action a rule that no source with
emissions below 50,000 tpy CO
Further, we are establishing an enforceable commitment that we will (1) Complete a study by April 30, 2015, to evaluate the status of PSD and title V permitting for GHGemitting sources, including progress in developing streamlining techniques; and (2) complete further rulemaking based on that study by April 30, 2016, to address the permitting of smaller sources. That rulemaking may also consider additional permanent exclusions based on the ``absurd results'' doctrine, where applicable.
This Tailoring Rulemaking is necessary because without it, PSD and
title V would apply to all stationary sources that emit or have the
potential to emit more than 100 or 250 tons of GHGs per year beginning
on January 2, 2011. This is the date when EPA's recently promulgated
LightDuty Vehicle Rule (LDVR) takes effect, imposing control
requirements for the first time on carbon dioxide (CO
[[Page 31517]]
applicability level in the Act, if the source did not already have a title V permit.
Under these circumstances, many small sources would be burdened by the costs of the individualized PSD control technology requirements and permit applications that the PSD provisions, absent streamlining, require. Additionally, state and local permitting authorities would be burdened by the extraordinary number of these permit applications, which are orders of magnitude greater than the current inventory of permits and would vastly exceed the current administrative resources of the permitting authorities. Permit gridlock would result with the permitting authorities able to issue only a tiny fraction of the permits requested.
These impactsthe costs to sources and administrative burdens to permitting authoritiesthat would result from application of the PSD and title V programs for GHG emissions at the statutory levels as of January 2, 2011, are so severe that they bring the judicial doctrines of ``absurd results,'' ``administrative necessity,'' and ``onestepat atime'' into the Chevron twostep analytical framework for statutes administered by agencies. Under the U.S. Supreme Court's decision in Chevron, the agency must, at Step 1, determine whether Congress's intent as to the specific matter at issue is clear, and, if so, the agency must give effect to that intent.\3\ If congressional intent is not clear, then, at Step 2, the agency has discretion to fashion an interpretation that is a reasonable construction of the statute. \3\ Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 84243 (1984).
To determine congressional intent, the agency must first consider the words of the statutory requirements, and if their literal meaning answers the question at hand, then, in most cases, the agency must implement those requirements by their terms. However, under the ``absurd results'' doctrine, the literal meaning of statutory requirements should not be considered to indicate congressional intent if that literal meaning would produce a result that is senseless or that is otherwise inconsistent withand especially one that underminesunderlying congressional purpose. In these cases, if congressional intent for how the requirements apply to the question at hand is clear, the agency should implement the statutory requirements not in accordance with their literal meaning, but rather in a manner that most closely effectuates congressional intent. If congressional intent is not clear, then an agency may select an interpretation that is reasonable under the statute.
Under the ``administrative necessity'' doctrine, Congress is presumed, at Chevron Step 1, to intend that its statutory directives to agencies be administrable, and not to have intended to have written statutory requirements that are impossible to administer. Therefore, under this doctrine, an agency may depart from statutory requirements that, by their terms, are impossible to administer, but the agency may depart no more than necessary to render the requirements administrable. Under the ``onestepatatime'' doctrine, Congress is presumed at Chevron Step 1 to have intended to allow the agency to administer the statutory requirements on a stepbystep basis, as appropriate, when the agency remains on track to implement the requirements as a whole. Each of these doctrines supports our action separately, but the three also are intertwined and support our action in a comprehensive manner.
Here, we have determined, through analysis of burden and emissions data as well as consideration of extensive public comment, that the costs to sources and administrative burdens to permitting authorities that would result from application of the PSD and title V programs for GHG emissions at the statutory levels as of January 2, 2011 should be considered ``absurd results.'' Therefore, we conclude that under the ``absurd results'' doctrine, Congress could not have intended that the PSD or title V applicability provisionsin particular, the threshold levels and timing requirementsapply literally to GHG sources as of that date.
Even so, the PSD and title V provisions and their legislative
history do indicate a clear congressional intent, under Chevron Step 1,
as to whether the two permitting programs applied to GHG sources, and
that the intent was in the affirmative, that the permitting programs do
apply to GHG sources. Our previous regulatory action defining the
applicability provisions made this clear, and we do not reopen this
issue in this rulemaking. Moreover, even if this longestablished
regulatory position were not justifiable based on Chevron Step 1on
the grounds that in fact, congressional intent on this point is not
clearthen we believe that this position, that the statutory
provisions to apply PSD and title V generally to GHG sources, was justified under Chevron step 2.\4\
\4\ In this preamble and the response to comments document we
fully address arguments that commenters and others have presented
about congressional intent and coverage of GHGs. We do so to be
fully responsive, even though we believe that this is a settled matter for which the time for judicial review has passed.
As to how to apply the PSD program to GHG sources, congressional intent, as expressed in the various statutory provisions and statements in the legislative history, is clear that PSD should apply at least to the largest sources initially, at least to as many more sources as possible and as promptly as possible over timeconsistent with streamlining actions that we intend to consider coupled with increases in permitting authority resourcesand at least to a certain point. This is the approach we take in this Tailoring Rule, and because it is consistent with congressional intent, we believe it is required under Chevron Step 1. Even if congressional intent were not clear as to how to apply the PSD requirements to GHG sources, we would have authority under Chevron Step 2 to establish a reasonable interpretation that is consistent with the PSD provisions, and we believe that the tailoring approach so qualifies.
As for title V, the statutory provisions and legislative history, which of course are different than those concerning the PSD program, do not express a clear intent as to how title V applies to GHG sources, which leads our analysis to Chevron Step 2, and here, again, we believe that the tailoring approach is a reasonable interpretation that is consistent with the title V provisions.
For both PSD and title V, we intend to use the tailoring approach to address smaller GHG sources over time, consistent with Congress's expectations that the programs would not impose undue costs to sources or undue administrative burdens to permitting authorities. However, we cannot say at this point how close to the statutory thresholds we will eventually reach. Because this rule establishes only the first two phases of the tailoring approach, we do not find it necessary to answer these questions in this rule, and instead we expect to resolve them through future rulemaking. We will remain mindful of the concerns that Congress expressed about including small sources in either program. We intend to consider the issue of the applicability of title V to GHG sources without applicable requirements (i.e., ``empty permits'') in future steps of our tailoring approach. When we do so, we will further assess the potential for the approach of excluding empty permits from title V to relieve burden consistent with statutory requirements.
In addition, because Congress can be said to have intended the PSD and title
[[Page 31518]]
V programs to apply to GHG sources, the Tailoring Rule is also
justifiable under the ``administrative necessity'' and ``onestepata time'' doctrines.
The legal analysis just described justifies each of the actions in this rule. The first two steps that we promulgate in this rule, which take effect on January 2, 2011 and July 1, 2011, constitute the most that permitting authorities can reasonably be expected to do by those times. Similarly, the 50,000 tpy floor that we promulgate through at least April 30, 2016 is reasonable because the information we have available now shows that it constitutes the most that permitting authorities can reasonably be expected to do by that date. Finally, the study and two additional rulemakingsto take effect by July 1, 2013 and April 30, 2016to which we commit in this rule establish a track for acquiring additional information and for taking further steps to address the application of PSD and title V more closely to the literal statutory levels. We intend to apply them as closely to those levels as is consistent with congressional intent and administrative imperatives, in light of the ``absurd results,'' ``administrative necessity,'' and ``onestepatatime'' doctrines, although, as noted previously, we will consider in future rulemaking how closely to the statutory thresholds we will be able to implement the PSD and title V programs as well as what to require with respect to a potentially large number of sources with empty title V permits.
In this rule, we are adopting regulatory language codifying our phasein approach. As we will explain, many state, local and tribal area programs will likely be able to immediately implement our approach without rule or statutory changes by, for example, interpreting the term ``subject to regulation'' that is part of the applicability provisions for PSD and title V. We ask permitting authorities to confirm that they will follow this implementation approach for their programs, and if they cannot, then we ask them to notify us so that we can take appropriate followup action to narrow our federal approval of their programs before GHGs become subject to regulation for PSD and title V programs on January 2, 2011. Narrowing our approval will ensure that for federal purposes, GHG sources below the size thresholds we establish in this Tailoring Rule are not obligated to hold PSD or title V permits until the states develop and submit revised PSD and title V programs that EPA approves, either because they adopt our tailoring approach or because, if they continue to cover smaller GHG sources, the states have demonstrated that they have adequate resources to administer those programs.
The thresholds we are establishing are based on CO
\6\ The relevant thresholds are 100 tpy for title V, and 250 tpy
for PSD, except for 28 categories listed in EPA regulations for which the PSD threshold is 100 tpy.
We are adopting this rule after careful consideration of numerous
public comments. On October 27, 2009 (74 FR 55292), EPA proposed the
GHG Tailoring Rule. EPA held two public hearings on the proposed rule,
and received over 400,000 written public comments. The public comment
period ended on December 28, 2009. The comments have provided detailed
information that has helped EPA understand better the issues and
potential impacts of this rule, and the final rule described in this
preamble incorporates many of the suggestions we received. We respond
to many of these comments in explaining our rationale for the final
rule, which is described in section V. The final rule adopts many
elements of the proposal but differs from the proposal in several
important respects. We proposed to apply PSD and title V to GHG sources
that emit or have the potential to emit at least 25,000 tpy
CO
The remainder of this notice describes our approach and rationale
in more detail. Following this overview, section III of this preamble
provides background information on the nature of GHG emissions, recent
regulatory developments that affect when and how GHG emissions are
subject to stationary source permitting, and the general requirements
of the PSD and title V programs. Section IV describes in detail the
summary of the key actions being taken in this rule, including the
determination of emissions, the thresholds and timing for the phasein,
our approach to implementing the phasein, and the additional future
actions we will take. Section V provides a more detailed description of
each action, explaining the policy and legal rationale and responding
to comments received. Section V begins with our decisions on how to
calculate the massbased and CO
III. Background
A. What are GHGs and their sources?
Greenhouse gases trap the Earth's heat that would otherwise escape from the atmosphere into space, and form the
[[Page 31519]]
greenhouse effect that helps keep the Earth warm enough for life.
Greenhouse gases are naturally present in the atmosphere and are also
emitted by human activities. Human activities are intensifying the
naturally occurring greenhouse effect by increasing the amount of GHGs
in the atmosphere, which is changing the climate in a way that
endangers human health, society, and the natural environment.
Some GHGs, such as CO
In the United States, the combustion of fossil fuels (e.g., coal,
oil, gas) is the largest source of CO
Different GHGs have different heattrapping capacities. The concept
of GWP was developed to compare the heattrapping capacity and
atmospheric lifetime of one GHG to another. The definition of a GWP for
a particular GHG is the ratio of heat trapped by one unit mass of the
GHG to that of one unit mass of CO
CO
B. Endangerment Finding and the LDVR
1. Endangerment Finding
On April 2, 2007, the U.S. Supreme Court found that GHGs are air
pollutants under CAA section 302(g). Massachusetts v. EPA, 549 U.S. 497
(2007). As a result, the Supreme Court found that EPA was required to
determine, under CAA section 202(a), whether (1) GHGs from new motor
vehicles cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare, or (2) the science is
too uncertain to make a reasoned decision. After issuing a proposal and
receiving comment, on December 7, 2009, the Administrator signed two distinct findings regarding GHGs under CAA section 202(a):
These findings, which were published December 15, 2009 (74 FR 66496), do not themselves impose any requirements on industry or other entities. However, they were a prerequisite to finalizing the GHG standards for lightduty vehicles, described next.
2. LightDuty Vehicle Rule
The LDVR, 75 FR 25324 (May 7, 2010), is a joint rule between EPA
and the Department of Transportation's National Highway Traffic Safety
Administration (NHTSA) that establishes a national program consisting
of new standards for lightduty vehicles that will reduce GHG emissions
and improve fuel economy. EPA finalized the national GHG emissions
standards under the Act, and NHTSA finalized Corporate Average Fuel
Economy (CAFE) standards under the Energy Policy and Conservation Act,
as amended. The new standards apply to new passenger cars, lightduty
trucks, and mediumduty passenger vehicles, starting with model year
2012. The EPA GHG standards are projected to result in an estimated
combined average emissions level of 250 grams of CO
The endangerment and contribution findings described previously
require EPA to issue standards under section 202(a) ``applicable to
emission'' of the air pollutant that EPA found causes or contributes to
the air pollution that endangers public health and welfare. The final
emissions standards satisfy this requirement for GHGs from lightduty
vehicles. Under section 202(a), the Administrator has significant
discretion in how to structure the standards that apply to the emission
of the air pollutant at issue here, the aggregate group of six GHGs.
EPA has the discretion under section 202(a) to adopt separate standards for each gas, a single
[[Page 31520]]
composite standard covering various gases, or any combination of these.
In the LDVR, EPA finalized separate standards for N
C. What are the general requirements of the PSD program?
1. Overview of the PSD Program
The PSD program is a preconstruction review and permitting program
applicable to new major stationary sources and major modifications at
existing major stationary sources. The PSD program applies in areas
that are designated ``attainment'' or ``unclassifiable'' for a National
Ambient Air Quality Standard (NAAQS). The PSD program is contained in
part C of title I of the CAA. The ``nonattainment new source review
(NSR)'' program applies in areas not in attainment of a NAAQS or in the
Ozone Transport Region and is implemented under the requirements of
part D of title I of the CAA. Collectively, we commonly refer to these
two programs as the major NSR program. The governing EPA rules are
contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51,
Appendices S and W. There is no NAAQS for CO
The applicability of PSD to a particular source must be determined in advance of construction or modification and is pollutantspecific. The primary criterion in determining PSD applicability for a proposed source is whether the source is a ``major emitting facility,'' based on its predicted potential emissions of regulated pollutants, within the meaning of CAA section 169(1) and either constructs or undertakes a modification. EPA has implemented these requirements in its regulations, which use somewhat different terminology for determining PSD applicability, which is whether the source is a ``major stationary source'' or whether the proposed project is a ``major modification.'' a. Major Stationary Source
Under PSD, a ``major stationary source'' is any source belonging to a specified list of 28 source categories which emits or has the potential to emit 100 tpy or more of any pollutant subject to regulation under the CAA, or any other source type which emits or has the potential to emit such pollutants in amounts equal to or greater than 250 tpy. We refer to these levels as the 100/250tpy thresholds. A new source with a potential to emit (PTE) at or above the applicable ``major stationary source threshold'' is subject to major source NSR. These limits originate from section 169 of the CAA, which applies PSD to any ``major emitting facility'' and defines the term to include any source that emits or has a PTE of 100 or 250 tpy, depending on the source category. Note that the major source definition incorporates the phrase ``subject to regulation,'' which, as described later, will begin to include GHGs on January 2, 2011, under our interpretation of that phrase discussed in the recent Interpretive Memo notice. 75 FR 17004, April 2, 2010.
b. Major Modifications
PSD also applies to existing sources that undertake a ``major modification,'' which occurs: (1) When there is a physical change in, or change in the method of operation of, a ``major stationary source;'' (2) the change results in a ``significant'' emission increase of a pollutant subject to regulation (equal to or above the significance level that EPA has set for the pollutant in 40 CFR 52.21(b)(23)); and (3) there is a ``significant net emissions increase'' of a pollutant subject to regulation that is equal to or above the significance level (defined in 40 CFR 52.21(b)(23)). Significance levels, which EPA has promulgated for criteria pollutants and certain other pollutants, represent a de minimis contribution to air quality problems. When EPA has not set a significance level for a regulated NSR pollutant, PSD applies to an increase of the pollutant in any amount (that is, in effect, the significance level is treated as zero).
2. General Requirements for PSD
This section provides a very brief summary of the main requirements
of the PSD program. One principal requirement is that a new major
source or major modification must apply BACT, which is determined on a
casebycase basis taking into account, among other factors, the cost
effectiveness of the control and energy and environmental impacts. EPA
has developed a ``topdown'' approach for BACT review, which involves a
decision process that includes identification of all available control
technologies, elimination of technically infeasible options, ranking of
remaining options by control and cost effectiveness, and then selection
of BACT. Under PSD, once a source is determined to be major for any
regulated NSR pollutant, a BACT review is performed for each attainment
pollutant that exceeds its PSD significance level as part of new
construction or for modification projects at the source, where there is
a significant increase and a significant net emissions increase of such pollutant.\7\
\7\ We note that the PSD program has historically operated in
this fashion for all pollutantswhen new sources or modifications
are ``major,'' PSD applies to all pollutants that are emitted in
significant quantities from the source or project. This rule does
not alter that for sources or modifications that are major due to their GHG emissions.
In addition to performing BACT, the source must analyze impacts on ambient air quality to assure that no violation of any NAAQS or PSD increments will result, and must analyze impacts on soil, vegetation, and visibility. In addition, sources or modifications that would impact Class I areas (e.g., national parks) may be subject to additional requirements to protect air quality related values (AQRVs) that have been identified for such areas. Under PSD, if a source's proposed project may impact a Class I area, the Federal Land Manager is notified and is responsible for evaluating a source's projected impact on the AQRVs and recommending either approval or disapproval of the source's permit application based on anticipated impacts. There are currently no NAAQS or PSD increments established for GHGs, and therefore these PSD requirements would not apply for GHGs, even when PSD is triggered for GHGs. However, if PSD is triggered for a GHG emissions source, all regulated NSR pollutants which the new source emits in significant amounts would be subject to PSD requirements. Therefore, if a facility triggers review for regulated NSR pollutants that are nonGHG pollutants for which there are established NAAQS or increments, the air quality, additional impacts, and Class I requirements would apply to those pollutants.
The permitting authority must provide notice of its preliminary
decision on a source's application for a PSD permit, and must provide
an opportunity for comment by the public, industry, and other
interested persons. After considering and responding to comments, the
permitting authority must issue a final determination on the
construction permit. Usually NSR permits are issued by state or local air
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pollution control agencies, which have their own permit programs
approved by EPA in their State Implementation Plans (SIPs). In some
cases, EPA has delegated its authority to issue PSD permits to the
state or local agency. In other areas, EPA issues the permits under its own authority.
D. What are the general requirements of the title V operating permits program?
1. Overview of Title V
The operating permit requirements under title V are intended to improve sources' compliance with other CAA requirements. The title V program is implemented through regulations promulgated by EPA, 40 CFR part 70, for programs implemented by state and local agencies and tribes, and 40 CFR part 71, for programs generally implemented by EPA.
In summary, the title V program requires major sources (defined and
interpreted by EPA to include sources that emit or have a PTE of 100
tpy of any pollutant subject to regulation) and certain other sources to apply for operating permits. Under EPA's longstanding
interpretation, a pollutant, such as a GHG, is ``subject to
regulation'' when it is subject to a CAA requirement establishing
actual control of emissions. Title V generally does not add new
pollution control requirements, but it does require that each permit
contain all pollution control requirements or ``applicable
requirements'' required by the CAA (e.g., New Source Performance
Standard (NSPS), and SIP requirements, including PSD), and it requires
that certain procedural requirements be followed, especially with
respect to compliance with these requirements. ``Applicable
requirements'' for title V purposes include stationary source
requirements, but do not include mobile source requirements. Other
procedural requirements include providing review of permits by EPA,
states, and the public, and requiring permit holders to track, report,
and annually certify their compliance status with respect to their permit requirements.
2. Title V Permit Requirements
This section provides a brief summary of the requirements of the title V program that are most relevant to this action. A source generally must apply for a title V permit within 1 year of first becoming subject to permittingfor new sources, this is usually within 1 year of commencing operation. The application must include, among other things, identifying information, a description of emissions and other information necessary to determine applicability of requirements and information concerning compliance with those requirements. The permitting authority uses this information to develop the source's operating permit.
Title V permits generally contain the following elements: (1) Emissions limitations and standards to assure compliance with all applicable requirements; (2) monitoring, recordkeeping, and reporting requirements, including submittal of a semiannual monitoring report and prompt reporting of deviations from permit terms; (3) fee payment; and (4) an annual certification of certification by a responsible official. The detailed requirements are set forth at 40 CFR 70.6.
In addition to the permit content requirements, there are procedural requirements that must be followed in issuing title V permits, including (1) Application completeness determination; (2) public notice and a 30day public comment period, including an opportunity for a public hearing, on draft permits; (3) EPA and affected state review; and (4) a statement of the legal and factual basis of the draft permit. The permitting authority must take final action (issue or deny) on the permit applications within 18 months of receipt. EPA also has 45 days from receipt of a proposed permit to object to its issuance, and citizens have 60 days after that to petition EPA to object to a permit. Permits may also need to be revised or reopened if new requirements come into effect during the permit terms or if the source makes changes that conflict with, or necessitate changes to, the current permit. Permit revisions and reopenings follow procedural requirements which vary depending on the nature of the necessary change to the permit.
E. The Interpretive Memo
On December 18, 2008, EPA issued a memorandum, ``EPA's Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit Program'' (known as the ``Johnson Memo'' or the ``PSD Interpretive Memo,'' and referred to in this preamble as the ``Interpretive Memo'') that set forth EPA's interpretation regarding which EPA and state actions, with respect to a previously unregulated pollutant, cause that pollutant to become ``subject to regulation'' under the Act. Whether a pollutant is ``subject to regulation'' is important for the purposes of determining whether it is covered under the federal PSD and title V permitting programs. The Interpretive Memo established that a pollutant is ``subject to regulation'' only if it is subject to either a provision in the CAA or regulation adopted by EPA under the CAA that requires actual control of emissions of that pollutant (referred to as the ``actual control interpretation''). On February 17, 2009, EPA granted a petition for reconsideration on the Interpretive Memo, and announced its intent to conduct a rulemaking to allow for public comment on the issues raised in the memorandum and on related issues. EPA also clarified that the Interpretive Memo would remain in effect pending reconsideration.
On March 29, 2010, EPA signed a notice conveying its decision to
continue applying (with one limited refinement) the Interpretive Memo's
interpretation of ``subject to regulation'' (``Interpretation of
Regulations that Determine Pollutants Covered by Clean Air Act
Permitting Programs''). See 75 FR 17004. EPA concluded that the ``actual control interpretation'' is the most appropriate
interpretation to apply given the policy implications. However, we
refined our interpretation in one respect: we established that PSD
permitting requirements apply to a newly regulated pollutant at the
time a regulatory requirement to control emissions of that pollutant
``takes effect'' (rather than upon promulgation or the legal effective
date of the regulation containing such a requirement). In addition,
based on the anticipated promulgation of the LDVR, we stated that the
GHG requirements of the vehicle rule would take effect on January 2,
2011, because that is the earliest date that a 2012 model year vehicle
may be introduced into commerce. In other words, the compliance
obligation under the LDVR does not occur until a manufacturer may
introduce into commerce vehicles that are required to comply with GHG
standards, which will begin with model year 2012 and will not occur
before January 2, 2011. We also reiterated EPA's interpretation that
the 100 tpy major source threshold for title V is triggered only by
pollutants ``subject to regulation'' under the Act, and we defined and
applied that term for title V purposes in the same way that we did for
PSD purposes. That is, we stated that a pollutant is ``subject to
regulation'' if it is subject to a CAA requirement establishing
``actual control of emissions;'' that a pollutant is considered
``subject to regulation'' for title V purposes when such a requirement
``takes effect''; and, based on the anticipated promulgation of the LDVR, that the GHG requirements of the
[[Page 31522]]
vehicle rule would take effect on January 2, 2011.
On April 1, 2010, we finalized the LDVR as anticipated, confirming that manufacturer certification can occur no earlier than January 2, 2011. Thus, under the terms of the final notice for the Interpretive Memo, GHGs become subject to regulation on that date, and PSD and title V program requirements will also begin to apply upon that date. IV. Summary of Final Actions
This section describes the specific actions we are taking in this
final rule. It describes the overall tailoring approach for NSR and
title V applicability, the steps we are taking to put it into place,
and future actions that we commit to take. The next section, V,
provides the legal and policy rationale for these actions. In that
section, we provide a description of our rationale and response to
comments for each action, presented in the same order as we describe the actions here.
A. How do you define the GHG pollutant for PSD and title V purposes? 1. GHG Pollutant Defined as the SumofSix WellMixed GHGs
We are identifying the air pollutant for purposes of PSD and title
V applicability to be the pollutant subject to regulation, which is the
air pollutant for GHGs identified in EPA's LDVR, as well as EPA's
endangerment and contribution findings.\8\ In the LDVR, EPA set
emissions standards under section 202(a) that were ``applicable to
emission'' of a single air pollutant defined as the aggregate sum of
six GHGs. The six GHGs, which are wellmixed gases in the atmosphere,
are CO
\8\ See 74 FR 66496, 66499, 665367. December 15, 2009.
Furthermore, as proposed, we are using an emissions threshold that
allows all six constituent gases to be evaluated using a common
metricCO
In addition, because we are implementing this phasein through the
term ``subject to regulation,'' the regulatory language is structured
such that the statutory massbased thresholds (i.e., for PSD, 100/250
tpy for new construction and zero tpy for modifications at a major
stationary source, and for title V, 100 tpy) continue to apply. As a
result, stationary source apply and stationary sources or modifications
that do not meet these thresholds are not subject to permitting
requirements. While technically evaluation of the massbased thresholds
is the second step in the applicability analysis, from a practical
standpoint most sources are likely to treat this as an initial screen,
so that if they would not trigger PSD or title V on a mass basis, they
would not proceed to evaluate emissions on a CO
Determining permit program applicability for the GHG ``air pollutant'' by using the sumofsix GHGs is based on EPA's
interpretation that the PSD and title V requirements apply to each
``air pollutant'' that is ``subject to regulation'' under another
provision of the CAA. As discussed previously, the final LDVR for GHGs
makes it clear that the emissions standards EPA adopted are standards
applicable to emission of the single air pollutant defined as the
aggregate mix of these six wellmixed GHGs. See LDVR, May 7, 2010, 75
FR 2539899, section III.A.2.c, and 40 CFR 86.181812.\9\ For reasons
explained in more detail in section V, we have determined it is legally
required, and preferable from a policy standpoint, for EPA to use the
same definition of the air pollutant for permitting purposes as that
used in the rule that establishes the control requirements for the
pollutant. We also believe there are implementation advantages for
applying PSD and title V in this way. Thus, this rule establishes that
a stationary source will use the group of six constituent gases for
permitting applicability, rather than treating each gas individually.
Similarly, you will include all six constituent gases because that is
how the air pollutant is defined, even though motor vehicles only emit four of the six.
\9\ 40 CFR 86.181812(a).
2. What GWP values should be used for calculating CO
We are requiring that wherever you perform an emissions
calculations involving CO
\10\ Table A1 to subpart A of 40 CFR part 98Global Warming Potentials, 74 FR 56395.
B. When will PSD and title V applicability begin for GHGs and emission sources?
Overview
In this action, we establish the first two phases of our phasein
approach, which we refer to as Steps 1 and 2. We also commit to a
subsequent rulemaking in which we will propose or solicit comment on
establishing a further phasein, that is, a Step 3, that would apply
PSD and title V to additional sources, effective July 1, 2013, and on
which we commit to take final action, as supported by the record,\11\ by no later than July 1, 2012.
\11\ Although we commit to propose or solicit comment on lower
thresholds and to take final action on that proposal by July 1,
2012, we cannot, at present, commit to promulgate lower thresholds.
It will not be until the Step 3 rulemaking itself that we will
gather and analyze data and receive comments that determine whether we have basis for promulgating lower thresholds.
We also commit to undertaking an assessment of sources' and
permitting authorities' progress in implementing PSD and title V for
GHG sources, and to complete this assessment by 2015. We further commit
to completing another round of rulemaking addressing smaller sources by
April 30, 2016. Our action in that rulemaking would address permitting
requirements for smaller sources, taking into account the remaining
problems concerning costs to sources and burdens to permitting
authorities. Finally, we determine in this action that we will apply
PSD or title V requirements to sources that emit GHGs, or that conduct
modifications that result in increases in emissions of GHGs, in amounts
of less than 50,000 tpy CO
[[Page 31523]]
Through this process, we will implement the phasein approach by applying PSD and title V at threshold levels that are as close to the statutory levels as possible, and do so as quickly as possible, at least to a certain point. The level and timing of the thresholds that we promulgate in future actions will be based on our assessment of the resulting costs to sources and burdens to permitting authorities, and that, in turn, will depend on such variables as our progress in developing streamlining approaches and on permitting authorities' progress in developing permitting expertise and acquiring more resources. At this time, we cannot foresee exactly when or in what manner those developments will occur. Therefore, we cannot promulgate more components of the tailoring approach beyond what we promulgate in this action. We can say only that we may continue the phasein process with further rulemaking after 2016. Alternatively, we may make a definitive determination in one of the future rulemaking actions that, under the ``absurd results'' doctrine, PSD or title V applies only to c
FOR FURTHER INFORMATION CONTACT
Mr. Joseph Mangino, Air Quality Policy Division, Office of Air Quality Planning and Standards (C50403), Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 5419778; fax number: (919) 5415509; email address: mangino.joseph@epa.gov.